November 13, 2008

Christian Brothers Investment Services (CBIS), a leader in socially responsible investing (SRI) for Catholic institutions, today announced an important step forward in its continued discussions with Cisco Systems (NASDAQ: CSCO) regarding executive pay. As a result of Cisco's willingness to discuss this issue, CBIS has withdrawn a shareholder resolution requesting that investors be given an advisory vote on the company's executive compensation policies and practices (commonly referred to as "Say on Pay"). Cisco's annual general meeting will be held today.

According to the agreement reached by Cisco's board of directors and shareholders led by Christian Brothers Investment Services and members of the Interfaith Center on Corporate Responsibility (ICCR), including Sisters of the Holy Names of Jesus & Mary, U.S.-Ontario Province, Walden Asset Management, Ethical Funds, The Sisters of St. Francis of Philadelphia, Catholic Health East, and Dominican Sisters of Springfield, IL., the company has proposed undertaking a number of initiatives. These initiatives include engagement between CBIS and members of Cisco's management and the Chairman of its Compensation Committee to discuss shareholder input on executive compensation, enhanced communications to shareholders regarding executive compensation, and a review of industry "best practices" on executive compensation. Cisco has also agreed to include on proxy statements a Cisco Compensation Committee email address that shareholders can use to communicate with the compensation committee of the board of directors.

In addition, Cisco has agreed to continue to provide and enhance transparent disclosures on its policies and procedures relating to executive compensation, potentially including the committee's consideration of shareholder input. CBIS and ICCR shareholders have requested a report from the Cisco board within nine months that details the board's recommendation on "Say on Pay."

Members of the Interfaith Center on Corporate Responsibility hold more than 1.2 million shares of Cisco stock and have been lobbying Cisco for five years on the issue of its executive pay; the resolution garnered 48% of Cisco's shareholder votes last year.

"We believe that Cisco is moving forward with a creative example of shareholder communication that is responsive to investors -- a critical first step in creating a fair and transparent executive compensation process," said Julie Tanner, Assistant Director of Socially Responsible Investing (SRI) at CBIS. "We are pleased with the progress we have made with Cisco, and believe the strong vote our resolution received in 2007 and our persistence on behalf of our shareholders has opened up discussions at Cisco and moved the issue of fair executive compensation forward," Tanner added.

In the weeks ahead, shareholders will speak with Cisco's Chair of the Compensation Committee about the potential for an annual advisory referendum process. They will ask the board to study the "Say on Pay" proposal and report back to shareholders on its recommendation regarding whether to implement the referendum. Tanner noted that shareholders believe the annual referendum is an important step toward enhanced board accountability on the executive pay issue.

"The core of Cisco's compensation policy is based on transparency and pay for performance," said Laura Graves, Director of Global Investor Relations for Cisco. "We appreciate the open and constructive dialog with Christian Brothers and members of the Interfaith Center on Corporate Responsibility on this issue."

While "Say on Pay" referendums are a relatively new issue for shareholders in the U.S., though they are common practice in the U.K., they are increasingly being adopted by large corporations, CBIS' Tanner said. AFLAC and TIAA-CREF have already implemented "Say on Pay" resolutions at their annual meetings. A growing number of companies, including Ingersoll-Rand, Par Pharmaceuticals, Verizon, Blockbuster and H&R Block, are slated to put their own compensation reports before shareholders for a vote in 2009.

"We believe that executive pay should be adjusted to a more reasonable and justifiable scale in order to share financial success with employees at all levels of a company as well as with shareholders," said Tanner. "Shareholders should be able to weigh in on whether the executive compensation package is reasonable and sufficiently tied to the success of the company."

According to Cisco's 2008 Proxy Statement, Cisco CEO John Chambers' total compensation package in Fiscal Year 2008 was $11.2 million, including a salary of $375,000, performance based incentive compensation of $3.0 million and stock equity awards valued at $7.8 million.

Forbes' Special Report on CEO Compensation (April 30, 2008) lists Mr. Chambers' average annual compensation during his tenure as $54.8 million using an alternate methodology.

For more information on CBIS, or to speak with Julie Tanner directly, please contact Jaclyn Connelly at (973) 732-3521 or [email protected]